34 Responses to “Economic Warfare as an Instrument of Transnational Organized Crime”

It was another extremely active week in the movement of metal into and out from the Comex-approved silver warehouses. More than 5 million ounces were physically moved [last] week, as total silver inventories rose another 2 million oz to 173 million ounces. This is the highest level of Comex silver inventories in many years, but the real story is in the movement, not the total.

This incredibly active physical turnover is unique to Comex silver.

There is no plausible explanation I can come up with other than it indicates that the vast bulk of Comex silver inventories are not available for sale at current prices and this necessitates new silver be deposited to satisfy demands for withdrawal.

The active churn of silver coming and going in the Comex warehouses points to a much tighter wholesale market than the illegally-set prices on the Comex futures market would indicate.

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19655 / April 13, 2006
SEC v. Ramy El-Batrawi, et al., United States District Court for the Central District of California, Case No 2:-06-cv-02247-(MRP)(RZ)
SEC Files Fraud Charges Against Ramy El-Batrawi, Adnan Khashoggi, GenesisIntermedia, and Others Arising Out of $130 Million Stock Loan and Manipulation Scheme
The Securities and Exchange Commission today filed a complaint in the United States District Court for the Central District of California charging Ramy El-Batrawi, Adnan Khashoggi, and others with orchestrating a scheme to manipulate the stock price of GenesisIntermedia, Inc. (GENI), a now-defunct public company that was based in Van Nuys, California. The Commission alleges that the scheme, which occurred between September 1999 and September 2001, resulted in the misappropriation of more than $130 million, the collapse of several broker-dealers, and the largest bailout in the history of the Securities Investor Protection Corporation.

According to the complaint, Ramy El-Batrawi, GENI’s Chief Executive Officer at the time, and Adnan Khashoggi, with the assistance of Richard J. Evangelista, Wayne Breedon, and Kenneth P. D’Angelo (a stock loan broker previously charged by the SEC and criminal authorities), developed a manipulation scheme by which they could profit from lending GENI shares (rather than selling them). The complaint alleges that El-Batrawi and Khashoggi, through an offshore entity called Ultimate Holdings, loaned approximately 15 million shares of GENI stock to Evangelista’s employer at the time, Native Nations Securities, a New Jersey broker-dealer, and more than a dozen other broker-dealers in exchange for cash based upon the market value of the shares.

According to the complaint, Ultimate Holdings loaned stock through Native Nations (and other broker-dealers) to Breedon’s employer at the time, Deutsche Bank Securities Limited in Canada, and received the current market value of the stock in cash. As GENI’s stock price fluctuated, the loaned stock was marked-to-market by the broker-dealers. Ultimate Holdings received additional cash when GENI’s price increased, and was obligated to return cash when the stock price dropped. By lending the shares in this manner, El-Batrawi and Khashoggi raised approximately $130 million without giving up control of the stock or depressing the market price for the stock.

The complaint also alleges that the defendants inflated GENI’s stock price by systematically engaging in fraudulent and deceptive practices that had the intended effect of generating additional cash proceeds from the broker-dealers participating in the stock loan transactions. Their illegal manipulative activities included reducing the supply of GENI stock to control the public float, promoting a short squeeze without disclosing to GENI shareholders that El-Batrawi and Ultimate Holdings had effectively already sold their stock through the stock loans and were attempting to prevent their stock loans from unraveling, and making trades through nominee accounts. The complaint alleges that while these activities were ongoing, El-Batrawi also was secretly compensating Courtney Smith, a well-known financial commentator, to tout GENI on television to create demand for the stock, and, in conjunction with Douglas Jacobson, GENI’s chief financial officer at the time, was making false and misleading statements in periodic reports filed with the Commission.

The manipulation caused GENI’s stock price to increase approximately 1,400%, from a low of $1.67 per share (split adjusted) on September 1, 1999 to a high of $25 per share on June 29, 2001. After the scheme collapsed in September 2001, GENI’s stock price plunged to pennies per share. El-Batrawi and Ultimate Holdings then defaulted on their obligations to repay the approximately $130 million they had obtained from the stock loans, which caused several of the broker-dealers in the stock loan chain to go bankrupt.

The Commission charged El-Batrawi, Khashoggi, Ultimate Holdings, Evangelista, and Breedon with violating the antifraud provisions of the federal securities laws, specifically Section 17(a) of the Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act, in connection with the stock loan and manipulation scheme. The Commission also charged GENI, El-Batrawi, and Jacobson with violating these antifraud provisions by making false and misleading statements and material omissions in GENI’s filings with the Commission; charged GENI with violating the reporting and books and records provisions of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13; and charged El-Batrawi and Jacobson with violating Section 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2 and aiding and abetting GENI’s violations of the reporting and books and records provisions. The Commission further charged Ultimate Holdings with making false or misleading statements in certain filings with the Commission, in violation of Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2. As relief, the Commission is seeking permanent injunctions against all defendants, an accounting of the money that defendants obtained as a result of their illegal conduct, disgorgement (with prejudgment interest), and civil penalties. The Commission is also seeking to bar El-Batrawi, Jacobson, and Khashoggi from serving as officers or directors of a public company.

The Commission acknowledges the cooperation of the United States Attorney’s Office for the Central District of California and the Federal Bureau of Investigation in this matter.

Bravo Patrick and Mark for keeping the effort alive to inform others about the stock underworld that by design is abusive in more ways than one. It is with great pleasure to hear someone one else (thx Patrick) say what I’ve been thinking since the late 90’s. I notice you evoked the knee jerk reaction from anonymous flo who missed the vital point of the April 13, 2006 SEC litigation release he posted while needlessly ranting about information, which was about a “Stock Loan and Manipulation Scheme” allegation “that the scheme, which occurred between September 1999 and September 2001, resulted in the misappropriation of more than $130 million, the collapse of several broker-dealers, and the largest bailout in the history of the Securities Investor Protection Corporation.” I invite flo to bravely take a naked short walk down memory lane to October 8. 2001 less than a month after building seven and the twin towers went down to read “Domino Effect? MJK Clearing fall could topple correspondents” by John Hintze Correspondent. MJK was unable to meet its obligations in a stock-loan transaction.http://www.securitiestechnologymonitor.com/issues/20011007/1620-1.html?pg=1
and it took the sec seven years after that article to grow some nads October 17, 2008 when the “Naked” Short Selling Antifraud Rule was finally adopted!

Dear Mr. Byrne,
I am a regular reader of DeepCapture.com, and I have just listened to your video presentation: Economic Warfare as an Instrument of Transnational Organized Crime.

Four years ago I was declared ‘not competent’ by the State of New Hampshire based upon certain statements of mine with respect to my personal experiences with Drexel Burnham, and one of Mr. Gene Phillips companies that attempted to defraud me of one of my family’s companies in the early 1990s, among others. My personal experiences are a hologram of what you have just described to your audience in the video. In fact, I have been communicating with your associate Mark Mitchell on several issues where we both have discovered the actors are the same.

Sadly for me, I filed complaints with the US SEC and the US DOJ in the early 1990s. In 1996, I was subpoenaed to testify in a related matter by the Organized Crime Task Force of the Eastern District of Pennsylvania. The case was styled USA v Rennert. I have written about my experience in an online series No Witness = No Case Installment #2 that has been posted on nhjustice.net. Six of the low level defendants in the plot to destroy the insurance industry of Pennsylvania using financial instruments created by Michael Milken el al, coupled with a scheme to create bogus stock and then loan it to insurance companies for capital reserves were convicted on all charges.

My request for that investigation to be expanded to include those miscreants in my complaint was denied by the AUSA’s superiors. I was led to believe that the denial extended to the highest levels of the FBI as well. There is credible evidence to show that certain of the individuals that I had named were agents of the US Government. Shortly after my testimony the retaliation began. Lethal force has been used.

At this time you may or may not be aware that ‘your’ Mr. Warren Buffet falls into the miscreant category in my family’s experiences. And, therefore, I find most distressing your great affection and admiration for him.

At the inception of your video presentation, I understood you to quote Mr. Buffet’s statement (to paraphrase): “If you don’t kick a man when he is down, when do you kick him”? In my personal experiences and complaints, Mr. Buffet waited until I was in extremis caused in part by Mr. Gene Phillips’ et als attempt to steal my family’s very valuable spring water property. And, just when I thought things were looking up – I had just won an $820,000 claim from Mr. Buffet’s insurance company ICIC, which I was told by the State of Nebraska Insurance Commission that Mr. Buffet was the sole stockholder, on May 2, 1994, Mr. Buffet colluded with Ms. Martha HW Crowninshield to defraud me out of settlement funds in an effort to TAKE the spring water rights. That was 20 years ago.

Whether Mr. Buffet realized the enormity of the fraud he had agreed to, is irrelevant under the law. The fact that Mr. Buffet falls into the Too Big Too Prosecute category is the problem that my family has been facing ever since. (Due to a series of situations, which I lay out in my open letter and attached Timeline of events to US Attorney General Eric Holder posted on nhjustice.net, there is reason to believe that the statues on the ongoing fraud have not tolled.)

The commoditization and securitization of water as Enron attempted back in the mid 1990s, and I believe is still in the works by others, to perhaps include those whom you describe in the video presentation herein, would certainly be a most dangerous weapon of mass destruction in the hands of those miscreants. My family long ago took the position that water is life, and it should never be weaponized (securitized) to be used by Transnational Organized Crime, or any else for that matter. Our position, some would say, is against our own self interest considering that the High Birches Springs located in Woodstock New Hampshire has estimated reserves of 10 million gallons per day.

Here’s something new I’ve been meaning to mention. The CME Group (owner-operator of the Comex) lists a spot month position limit and monthly limit on actual deliveries of 7.5 million silver oz and 300,000 gold ounces by any one trader.

Yet the CME is reporting that JPMorgan in its house account took delivery of more than double the amount of gold allowed in any one month. Since JPMorgan held the 6,254 gold contracts from first delivery day forward, it also means that JPM was in violation of CME rules limiting spot month holdings in gold futures of 3,000 contracts for the entire month. The violations in silver were less egregious but were violations nonetheless.

I’m sure, if pressed, the CME could come up with some cockamamie excuse why JPMorgan was allowed to hold and take delivery of so many gold and silver contracts in one month, but the real reason is that JPMorgan is above all rules and law.

The CFTC backed down on policing JPMorgan and it would be foolish to think the CME would restrict its most important client in any way. Far from a band of brothers, this is a brotherhood of criminals. Besides, rules are for the little people, not JPMorgan.

This is the work of several of your advesaries that may be of use to you if the legal issue in canada results in needed recourse. Of special note is one of the plaintiffs was sentenced to four years, and the other has made claim that his home went up in smoke by arson. The second owned the siliconinvestor site twice, the same site that harbors many of your advisaries who probably bank rolled “the first U.S. judgment ever issued under The SPEECH Act” legal precedent set.

Thank you Patrick for this and for all the tremendous work you have done over the past decade. I would like to think that I might do as much for good with my own life, but I am off to a slow start! Godspeed.

From a very skinny bunny at the bottom of the rabbit hole, THANKS for letting a little light in!!
Now maybe the cooks [IRS] will start specializing in rats [ mafia], weasels [financial analysts and SEC enforcers] and perhaps a elephant [political leader] or two instead of us starved, skinny rabbits.
After all the animals listed are why the green is all gone from our world, they have fed until nothing remains for us rabbits.
It would sure give the cooks a lot more meat/money to work with and might even fill up the freezer/ national debt until we could all gain back some of our lost weight/wealth.
A bunny can dream can’t it !!!!

“A while back (I can’t remember exactly when), I wrote that growing inventories for a precious metal does not mean that prices can’t rise substantially and that things needed to be put into perspective. The best example is gold. Total world inventories of gold have grown every single day for the past 5,000 years, and that inventory growth alone hadn’t prevented the price from moving higher over time. Therefore, those concerned about inventory growth would never invest in gold, as world inventories have done nothing but grow over the centuries. Yet few investors even think about growing world inventories in gold. That’s because the amount of people (prospective gold investors) and buying power have grown as much or more than actual gold supply and inventories have grown.

The same metric must be applied to silver. Yes, the world depleted silver inventories non-stop for more than half a century and world inventories have now begun to grow after 65 years of depletion to near-exhaustion. But any precious metal that has investment demand must be considered differently than a commodity with no investment demand.

“As a result of 65 continuous years of silver inventory depletion, there are now less silver ounces in the world than there are gold ounces; where formerly there were five times more silver ounces than gold ounces. While world silver inventories are down 90% since 1940 to just above one billion ounces, world gold inventories are up from 2 billion oz to 5.5 billion oz. Yet, despite the stunning about face in relative inventories and with silver, in effect, becoming rarer than gold, the relative price of silver compared to gold is the same as it was 60 years ago. In other words, in 1950 the silver/gold ratio was near the same 63 to 1 ratio that it is today.

“How can that be? How can one comparable commodity lose 90% of its inventory and another comparable commodity have its inventory almost triple and there be no change in relative price? There is no free market explanation for what I just described. The only possible explanation is price manipulation, which is why I devote so much time to the subject. Price manipulation is not the focus of this article, but it’s never far away when discussing silver and gold. In fact, the relative inventory change in gold and silver over the past 60 years with no change in relative price is proof of manipulation on its face. It also means that silver is much more manipulated in price than in gold, and an incredible investment opportunity.

Your comment, “…Total world inventories of gold have grown every single day for the past 5,000 years, and that inventory growth alone hadn’t prevented the price from moving higher over time. …”

I do have to take a little exception to that comment. Some even postulate that gold does not follow the economic laws of supply and demand. However when the Spanish raided the gold holdings of the various native Indian people of the Americas the loot was to large that gold actually fell in price and it took more ounces to buy the same goods and services in Europe.

What can be agreed on currently is that precious metal price suppression is ultimately going to wreck worldwide financial systems. People involved need to go to jail. The problem currently is that governments are bought through the manipulative acts of those in the precious metal markets. Our US Constitution states, through the Coinage Act of 1792, that those involved should suffer DEATH in the not unrelated issue of counterfeiting. Look it up.

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